Cigarette makers filter marketing support as taxes burn both ends against the middle.
Gary Frauenhofer’s cigarette plan: move to a premium focus while holding onto a regionally strong, deep-discount brand.
Post-SCHIP, the Florida retailer says the price gap on traditional discount brands has evaporated. That, coupled with multipack promotions from the big cigarette manufacturers, pretty much paves the path for a premium-driven approach.
“A lot of the older discount brands—Basic, Doral, Gold Coast—are not really discount brands anymore,” says Frauenhofer, category manager for Dion’s Quik Marts, a 12-store chain based in Key West, Fla. “These secondary brands have lost value within the category and, as a result, we’ve deleted those SKUs.”